BUFFALO, N.Y. -- College freshmen nationwide are heading to
campus armed with credit cards and ready to rack up debt. They know
how to squeeze the trigger on purchases but often they don't have
experience in handling the aftermath of debt. And many of them are
making financial decisions for the first time.
According to a 2009 Nellie Mae (a Sallie Mae student loan
• One-third of freshmen arrive on campus with at least one
• Many have more than four credit cards
• Eight-four percent of undergraduates will eventually have
at least one credit card
• By graduation they will have an average credit card debt
of more than $4,100
• Almost one-fifth of graduating seniors will owe more than
$7,000 on credit cards alone
To help students make better decisions, the University at
Buffalo last year launched a financial literacy program managed by
a former financial aid administrator. As UB's financial literacy
program coordinator, Kellie Kostek's objective is to reach as many
students as possible to teach the benefits of fiscal
responsibility. "Most students arrive on campus having never had a
serious conversation with their parents about managing debt," she
says. "They just don't know where to begin."
As the new semester gets underway, Kostek's weeks are filled
with financial workshops, special appearances to UB 101 orientation
classes and talking to resident assistants (RAs) -- who are often
the first to identify the effects of debt crisis in students.
Kostek often dedicates entire workshop sessions to the amount of
money spent on coffee and fast food items alone, which can add up
to more than a thousand dollars a year. She discusses better time
management so that coffee can be made in the residence hall and
snacks can be made or purchased more cheaply. Kostek stresses using
credit cards sparingly, for emergencies only, if possible -- not
for everyday impulse buys.
Kostek's other money management tips for students include:
• Don't carry around your credit cards to cut down on
• Don't shop when you're hungry
• Limit eating out to once a week
• Rent DVDs versus going to the movies
• Start a savings habit, pay your savings account first --
every time you get paid
• Volunteer on Campus -- always free food and great
• Pay bills online or set up auto transfers to your savings
• Look into transportation alternatives such as ride
sharing, public transportation and bicycling
Kostek notes that college students are target for many credit
card companies and easily fall prey to direct mail marketing credit
card issuers. And because they are unsophisticated in handling a
budget, are stressed for time and many are negotiating the
challenges of living on their own for the first time, they're not
thinking about the consequences of credit card debt.
UB, like many colleges and universities, prohibits credit card
companies from soliciting on campus. Direct mail solicitations for
credit cards to students on campus are not prohibited, however. And
there is growing concern at UB and other schools about the ways in
which all debt affects student retention.
Students who rack up enormous amounts of debt before graduation
may be forced to drop out of college because they have no means of
paying their student account charges (campus cash), Kostek notes.
And many students who leave early have large bills and little hope
for getting hired (without the degree/credential).
Kostek also points out that future employers are now
investigating credit histories and credit scores as part of a
background check before hiring. "Even landlords are asking for
credit histories before renting apartments. It's a good indicator
of how responsible a student is," she says.
Even before arriving on campus, Kostek says there is one
important step parents and students should take to prevent debt
burden: "Take the time to fill out the Free Application for Federal
Student Aid (FAFSA), and take out a less-expensive federal student
"Not only is the interest less, FAFSA also offers several
flexible repayment plans that may be personalized for student needs
if they are low income (field or job) or have no income
(unemployed, can't find a job)," she says.
The University at Buffalo is a premier research-intensive
public university, a flagship institution in the State University
of New York system and its largest and most comprehensive campus.
UB's more than 28,000 students pursue their academic interests
through more than 300 undergraduate, graduate and professional
degree programs. Founded in 1846, the University at Buffalo is a
member of the Association of American Universities.